Traumatic brain injury (TBI) is a major public health problem with no effective clinical treatment. Use of bioactive scaffold materials has been shown to be a promising strategy for tissue regeneration and repair in a number of injury models. Of these scaffold materials, urinary bladder matrix (UBM) derived from porcine bladder tissue, has demonstrated desirable properties for supporting and promoting the growth of neural cells in vitro, suggesting its potential as a scaffold for brain tissue repair in the treatment of TBI. Herein we evaluate the biocompatibility of UBM within brain tissue and the effects of UBM delivery upon functional outcome following TBI. A hydrogel form of UBM was injected into healthy rat brains for 1, 3, and 21 days to examine the tissue response to UBM. Multiple measures of tissue injury, including reactive astrocytosis, microglial activation, and neuron degeneration showed that UBM had no deleterious effects on normal brain. Following TBI, the brains were evaluated histologically and behaviorally between sham-operated controls and UBM- and vehicle-treated groups. Application of UBM reduced lesion volume and attenuated trauma-induced myelin disruption. Importantly, UBM treatment resulted in significant neurobehavioral recovery following TBI as demonstrated by improvements in vestibulomotor function; however, no differences in cognitive recovery were observed between the UBM- and vehicle-treated groups. The present study demonstrated that UBM is not only biocompatible within the brain tissue, but also can exert protective effects upon injured brain.